Cabaletta Bio, Inc. (CABA) Earnings Call Transcript & Summary

Thanks, everyone. We'll get started now. Good afternoon. Welcome to the JPMorgan Presentation from Cabaletta Bio. I am [ Wang Yeo ] from JPMorgan's Healthcare Investment Banking team, and it's my pleasure to be introducing you to Steven Nichtberger, Co-Founder and CEO of Cabaletta Bio. Just as a reminder, for the logistics, we'll have Q&A at the end of this presentation. So, I'll read off those online, and we'll be passing along the microphone in the room. Thanks. Over to you, Steven.

Terrific. So thanks, everyone, for being here. And thanks to my friends at JPMorgan for the opportunity. So, I'll be making some forward-looking statements and would refer you to our SEC filings for more information. So, Cabaletta was formed in order to develop and launch the first curative, targeted cellular therapies for patients with autoimmune diseases. We were inspired to start the company based on a science paper that demonstrated the ability of a CAR T product that was slightly modified to potentially safely deliver the sort of efficacy that you routinely would see in cancer, only this would be in autoimmune diseases. Everything changed in the middle of 2021 when a case study was published in the New England Journal of Medicine, demonstrating the safety and the activity of a routine CD19-directed CAR T product. As a result of that publication, our team, which was focused in this area for many years already, was mobilized and we engaged with and consulted with the author of that case report. Based on those interactions and our own knowledge over the years, we were able to quickly design and engineer what we believe is the first and still the only CAR T product that was specifically designed for autoimmune patients. Specifically, what I mean by that is it was designed to change as few elements as possible from the academic construct that delivered the data that ignited the field of autoimmune CAR T. That includes a 4-1BB costimulatory domain. The fully human equivalent of the murine binder that was used in that study and a manufacturing process that although one of our scientific founders invented the 1-day manufacturing process, which currently is licensed to some of the industry, we chose not to do that because that would add risk to the profile of our product. Instead, we have a routine approach to manufacturing. We didn't stop there. We went on and designed a novel clinical program that accelerates our path to approval potentially. It includes no need for dose finding. We start with what we believe is a fully therapeutic dose based on data. We also have independent parallel cohorts within each of our trials with homogeneous populations of patients and each of them has 6 patients in it. This allows us to enroll patients in parallel within each study rather than sequentially as is typically the case in the initial CAR T experience. We already have a broad portfolio of indications and getting ever broader. I'm pleased to tell you that we've initiated enrollment in our clinical program and our cash runway has recently been extended into the first half of 2026. On October 10 or 11 of 2022, we in-licensed the binder that became the fully human binder in CABA-201. On that day, we said not having an IND even in our sights that in the first half of 2024, we would deliver initial clinical data on CABA-201. I'm thrilled that just yesterday, we were able to expand that guidance, which was previously that we would deliver the data in lupus and/or myositis, we're now committing to deliver data in lupus and myositis, the initial clinical data. That will be in the first half of 2024 as predicted. We'll follow that in the second half of 2024 with the initial clinical data from both the systemic sclerosis and the generalized myasthenia gravis trials. While we're doing this, and while we're accelerating our clinical program, we're in the hockey stick phase where you're going to start to see a lot of sites opening and a lot of enrollment occurring. While we're doing this, we'll be securing manufacturing for commercial purposes in 2024. We'll seek to expand the portfolio of IND cleared indications and we'll innovate and continue to look for opportunities to advance the field and to continue to lead the field no matter what the technology platform. So, let's take stock of where we are today. We have a pipeline that is targeting autoimmune diseases that have very high unmet need. I think we have all companies and investors underestimated the pain and the suffering and the true unmet need in patients with autoimmune diseases. And I'm thrilled that the industry is now focused on this very high unmet need with real purpose. For us, it means having 2 different programs, our legacy program, which is a CAR T program and CABA-201. The CAR T program has 2 clinical trials ongoing. One of them is in pemphigus vulgaris in an arm with preconditioning. The second program, the second trial, I should say, is the MuSK myasthenia gravis trial, which is evaluating that product with no preconditioning regimen. These data will be presented in due course. But more importantly, the in-house observations we have made and we will be making are going to continue to inform the choices we make in the CABA-201 program. So, turning now to the CABA-201 program. First, let me say that both of these products and programs have Fast Track designation. We just recently yesterday announced that our scleroderma and our myasthenia -- I'm sorry, our scleroderma program and our myositis program have both earned a Fast Track designation, particularly dermatomyositis, the largest segment of the myositis population. The Fast Track designations are consistent with everything that we focus on that first slide, developing and launching the first curative targeted cellular therapies. And to do that, we've designed a program where each of the indications, myositis, lupus, scleroderma and myasthenia gravis, each have parallel cohorts of 6 patients in a program, which we designate and FDA allowed and agreed a Phase I/II program. There is no dose finding in these studies. We're starting with what we believe to be a therapeutic dose. We have the flexibility to go up or down if we see fit, but we have a therapeutic dose at the start. The Phase I/II study is filled with 6 patients in each cohort. As soon as those 6 patients are treated with sufficient follow-up, we will be engaging with FDA regarding pivotal trial execution, design and implementation. That allows us, right now, 5 shots on goal for the 2 clinical studies that are up and running, the myositis and the lupus are actively enrolling as well as ultimately 9 shots on goal once the scleroderma and myasthenia gravis trials go through the study start-up phase and open sites. In each of these cohorts, there's the opportunity data permitting to simply extend the current arm of that study in order to fulfill what we believe would be adequate Phase III requirements. When you're curing a patient going against even the best standard of care versus any of the standards of care that you can think of in these diseases, you're going to have minor responses relative to complete cures. The statistics would guide you to the fact that you don't need many patients to prove the efficacy. So you need safety and we'll talk about how this program establishes a safety database far larger for all of the -- for each of the indications based on what we do in all of the indications. So now, let's focus on the academic data that has really ignited the field. Across a variety of autoimmune diseases; lupus, myositis, scleroderma, all refractory patients, 15 of them, 100% demonstrated translational responses at 1 month, that is to say the T cells went up, the B cells went down. And predictably, when the B cells are reduced to 0 within days of the administration of the therapy, at 3 months, you see true clinical responses that are profound. I was sitting in a room with a number of leaders in the myositis field, when the first case report of that data was shared by Professor Schett with these leaders in rheumatology from across the United States. The data had not yet been published, and we were privy to it because of our exclusive relationship with Professor Schett at that time. And it was jaw-dropping. The comments were this disease doesn't respond like that. We've never seen anything like that. And at 3 months, it's the speed that's astonishing. Oh, by the way, the magnitude of treatment effect is equally astonishing. Maybe as importantly, we're talking about treating patients with autoimmune disease, as importantly, what were the risks. It turns out that fever is the most common side effect. So, we're going to try to cure your disease, which is untreatable until now, not even some FDA-approved therapies for myositis. We're going to cure your disease, give you the chance for a cure. What are the side effects? Fever, treatable with Tylenol or an IL-6 antagonist. There was in this cohort of 15 patients, 1 CRS event because fever is Grade 1 CRS. One CRS event where the patient was short of breath before the trial and they were more short of breath after the trial had begun and treatment was administered. They needed more oxygen than they usually used. They were a Grade 2 CRS. When we talk about evaluating data in this field, the fever, unlike cancer, the fever is a good sign. It shows you that the B cells are being killed, the cytokine is released and ultimately, you will get what you need in terms of activity. So, it is our view that we have to focus on anything greater than fever because fever is no longer a harbinger of bad outcomes as it was in the early days of CAR T. Fever is expected, it's desired. It's manageable. Anything greater than fever forces you to think about longer stay in the hospital, more inpatient, not outpatient therapy with your product. So when you look at what we are doing, which we expect and hope will replicate in the next few months what you see here, we're thinking about outpatient therapy as the option for autoimmune patients. And the reason is the safety profile that we believe is possible with a correctly designed product and program. Furthermore, the durability. So, not only will we try to cure, do it safely, but it will be durable. So in this trial, in this evaluation of 15 patients, this cohort, there were no treatment failures and no medications required to manage the disease in any patient at any time. And the longest follow-up is now about 28 months, I believe. So, it's really astonishing data, like we're all in this industry for a reason. And what -- just a gift to be able to help nurture this field and this therapy to patients. Within 3 to 7 months, a median of 4 months, remarkably to everybody's surprise, unlike cancer or leukemia for sure, the B cells repopulate, these are healthy young patients for the most part, even the older ones, the B cells repopulate normal B cell populations, all naive B cells. You're not seeing recurrence of disease. So, this is really a profound starting point, an aspiration for all of us. When you turn to CABA-201 now, remember, it's a CD19 CAR T product that was specifically designed for autoimmunity and in particular, designed to be very similar to the product that gave you the data that I just reviewed. It has a 4-1BB costimulatory domain. It has a fully human CD19 binder, which is essentially the humanized equivalent of the binder that was used in that study. And our binder has been evaluated not at the dose clinically, not at the dose we are using, but at 2 to 3x the dose we are using and it has an excellent safety profile. So, we're really thrilled about the opportunity to treat and then share our clinical data with you in the first half of this year. This slide is intended to walk you through the unmet need. So, our RESET clinical program, which is Restoring Self-Tolerance, the RESET clinical program has 4 clinical studies that are IND cleared. The first 2 myositis and lupus are actively enrolling. And over the coming weeks, we will see a substantial increase in the number of clinical sites that are actively enrolling patients in these programs. Remember, this is not 1 patient per month. It's multiple patients per month that are possible because of these multiple cohorts in each of the trials. In the myositis case, these are patients who -- their only option is IVIg monthly at a cost of about $0.5 million a year. It has modest efficacy. And for those who don't have the dermatomyositis form of myositis, there are no approved products. Think about that when you think about a curative potential that can be safely administered. How long does that take to get approved? To prove superior efficacy and to be able to bring to agencies around the world, the opportunity to treat patients. Lupus, turns out 40% of all the lupus patients in the United States in the world have lupus nephritis. In the U.S., there are 160,000, 320,000 patients approximately in that order. 40% of them have lupus nephritis. Of those who have lupus nephritis, say it's 100,000 patients, they've got about a 25% chance of being dead or on dialysis. Now, this is mostly 20-year-old women, 30-year-old women. You go to the doctor, you're diagnosed with lupus, your chance of being dead or on dialysis in the next decade, about 25%. Would you like to have a CAR T therapy whose primary side effect is fever? People begin to question in autoimmunity is there really an unmet need. These are the data. That's the discussion that's going to happen. In scleroderma, it's essentially a 10-year death sentence for half the patients. And I can go on and on, but in myasthenia gravis, the chances of myasthenic crisis and hospitalization and even death, the system today is using therapies that provide modest efficacy. They're breakthroughs compared to what existed before, but it's modest efficacy. And that efficacy doesn't prevent future crisis, doesn't prevent the need for hospitalization and other therapies. So across the board, the unmet need is compelling. In 2024, we expect to file INDs for an additional 1 million patients or more. There is so much opportunity here for as many of the autologous CAR Ts to the extent that an allogeneic can deliver or to the extent that NKs or any other -- it doesn't matter. These patients have so much unmet need and there are so many of them. So, we're just thrilled that this field has been [ led to fire ] and really even more thrilled quite honestly, to have the right people in the right place to be able to deliver on the promises that we've made. So, this is a map of our clinical program. There are 9 cohorts. They are listed in the myositis clinical program. There are 3 cohorts. The subtypes are labeled in the lupus clinical study, which is also actively enrolling around the country. There are 2 cohorts. In the scleroderma trial, there are 2 and in the myasthenia gravis, there are 2. You'll notice that in every case, we seek to cover every possible patient. The breadth of this program is really astonishing. The colored boxes represent places where academic or industrial trials that are investigator-initiated have demonstrated efficacy. So, we can look at those and say, wow, that's really -- that's a pretty straight shot. That's likely -- very likely to work. It's not our belief that other subsets of these individual diseases will not respond similarly. But just in case you don't know what you don't know. Just in case we're studying them in individual homogeneous cohorts and you'll understand even more about why we're doing that in a moment. It has the benefit of allowing us to reduce the risk that maybe the unknown occurs. It has the benefit of allowing us in the myositis program not to enroll one patient per month as is typically the case, but to enroll 3 patients, right? And it's not 1 month in between each patient in our programs based on years of working with FDA. It's far less than that in many of the cases that we're looking at on this slide. So, we have a program where risk is reduced and reach is maximized. How are we accelerating time lines. So, to demonstrate efficacy in lupus, you probably need -- and curative outcomes are assumed to be the base case here, right? I'm asked often, what do you expect? What do you anticipate? What are you looking for? The answer is cure, right? Complete response at least, cure perhaps not until 20 years from now, but complete responses for sure. When you compare that to the standard of care, does it take 30, 40, 50, 60 patients, but on safety, you need far more than that. And as a company, we need far more than that. I'm sure regulators need far more than that. The way we are designed in our clinical program, every 1 of these 9 cohorts, each enrolling 6 patients is the same drug, the same dose, the same evaluation of safety. It's all internally consistent. And the safety database from everyone is used for each indication. So, we don't need 200 or 300 large clinical trials in each indication to demonstrate safety. We believe that both physicians and regulators will appreciate that an autoimmune patient on top of the -- whatever number of patients are in the efficacy trial in pivotal studies for each of these, that the full cohort of patients in all of these indications will represent the safety database to get all of us comfortable with the outcomes that we can expect. So, this is just a deep look at the RESET myositis program. They're all pretty much the same, each of the trials. If you have the disease and you have the antibody profile that would register you into any of the cohorts, you can be in the trial as long as you don't have a confounding aspect to your profile, like maybe you got rituximab within the last 6 months, we probably don't want that patient in the trial until 6 months has elapsed. Maybe you refuse vaccination. During the period of time where you are at risk of infection, we want to be sure you are not going to be infected to the extent that vaccinations that are routinely administered can be administered, that's something that we require in our program. The trial is the 3 cohorts, the same dose, the same drug for each of them, routine preconditioning. The study objectives, the primary objective is 28-day safety. But at the same time, we're looking at the clinical activity, the translational data, the radiographic data, the serologic data. All of it will be part of what we report, not in a combined manner to investors but on a patient level manner so that you can truly appreciate the risk and the benefit of our product. The lupus trial, similar design. You have to -- in each of these cases, I want to say, have the disease beyond treatment beyond multiple attempts at controlling your disease and still have the active disease, which I failed to say on the prior slide, but that's the same situation. By the way, the overwhelming majority of these patients are on multiple failed therapies. So, this is not a rate-limiting characteristic of the design of our trials. It simply identifies the vast majority of the prevalent population in each. So listen, everybody is jumping into this autoimmune CD19-directed therapeutic category. Even for us, it's getting confusing, right? It's the truth. We looked at our own data in our own plans and we asked ourselves, how are we going to evaluate success for us. And that led to the conclusion that we should share that with investors. And that led to the conclusion that we should create sort of a tear sheet for investors to use when they evaluate not only us but others. There's too many products out there claiming awesome things, right? We can manufacture our product in 2 days. Well, how many weeks of hospitalization are required to make sure that the delayed potential CRS with delayed pharmacokinetics of those types of products, how long will it take until all of us are comfortable that outpatient therapy might be possible. Like you need to understand, is it day 8 like Professor Schett showed, the CAR Ts rising and back down almost immediately with the B cells disappearing within a week or is there a different profile. All of this matters a lot because it shows and it reflects the potential, number one, for the therapeutic outcome you want, that T cells have to rise, the B cells have to disappear. And that predicts the 3-month clinical response, which is nearly complete in most of the patients. You also want to understand the CRS, not how many events of CRS were there, but how many CRS greater than fever because fever at the end of the day in autoimmune patients seems to be a favorable thing that predicts the activity of the B cells being killed. You want to understand the rate and the grade of ICANs as well as infections across all of this time line. You want to understand the hospitalization required, right? Is it a 2- or 3- or 4-day hospitalization? And to be clear, we're in that category to start. If and when we demonstrate the sort of profile that I've shared with you from the academic experience, we will move very quickly towards outpatient opportunities. At the University of Pennsylvania, where our legacy platform was invented, they have a therapeutic regimen in the clinical program in the use of CAR T where 4-1BB-directed CAR Ts are administered routinely as outpatient therapy. They're not the only ones. The safety profile of the 4-1BB containing CAR Ts is widely acknowledged. The CD28 CAR Ts are not administered as outpatient therapy because the side effects need to be managed more closely in the hospital. In autoimmunity, you want to be sure that you can maximize throughput. There are going to be rate-limiting steps to the uptake if you don't actually have an efficient product and an ability to actually have a label that gets you to the point where you cannot be a burden on the health care system. At 3 months, you should expect to see clinical resolution. You should expect to see the radiographic and the serologic and the biologic markers disappear. Vaccine titers, though, should be unchanged. If you treat a patient with a BCMA CAR as well as a CD19 CAR simultaneously, you will eliminate the vaccine. Any vaccination that patient had from the time they were an infant on up has to be re-administered. In partnership with Professor Schett early days, a couple of years ago, we took his patient samples. We're the only company in the world that he shared his precious patient samples with such that we could use our translational research expertise in autoimmune CAR T to ultimately determine that the vaccine titers remain. They're not eliminated by a routine CD19 CAR of the sort that he used. That's really important information for the industry. That's why we did the study. And so you want to look at vaccine titers. You want to understand are patients being put at more risk of infection because they need protection during the period where the B cells are gone. And then finally, you want to see durability and you want to see return of the B cells, as I mentioned, the normal healthy B cells with no recurrence of disease over the long run. Our manufacturing strategy, which I said is one of our priorities in the next 12 months in 2024 to be able to manufacture sufficient both reliably and scalably sufficiently to launch the product. And so historically, we've used Penn, who has been an astonishingly reliable and effective partner for us. The commercial CDMO that we have partnered with in the vaccine, in the -- I'm sorry, vector space is Oxford Biomedical and WuXi in the cell therapy space. We have dedicated people in dedicated suites that we can expand through in the WuXi organization in Philadelphia. So, this is all Philadelphia-centric as the company is. The late phase and commercial plan, which has allowed us to be incredibly capital efficient as a company, the late phase and commercial plan is now to advance 1 of the 3, if not 2 of the 3 options that are shown on the slide, either expanding the CDMO relationships, moving into or assuming ownership of a facility to manufacture as well as active strategic partnership discussions where cell therapy manufacturing could be part of the relationship, either regionally or globally. And so all of these are in parallel, have been advanced and will continue to be advanced until we arrive at the optimal solution to be able to deliver the full promise of this opportunity to patients. So, how do we secure and expand our leadership in autoimmune cell therapy. There are so many players coming into the space. So first, execution, execution, execution, implementation of our programs. The table is set for 2024, being able to enroll many patients in each of the programs in each of the clinical trials really important, really important design-wise, more IND filings, more patients coming into the program, 6 patients treated, we talk with the regulators and we determine the path forward. That path forward may well be simply an extension of the existing homogeneous sample of patients. One of the choices we made early on was not to actually initiate a basket trial as you would in cancer. And the reason we made that choice is because we believe that from a homogeneous set of 6 patients, it's far more likely that agencies around the world will allow us to move immediately into pivotal programs and those pivotal programs don't need to be hundreds of patients because in all of the other indications, the same dose, the same exact profile of assessment is being used and we can collect that information and support any effective product indication with all of that safety data. But that's not enough. And as we expand into these other potential broader IND and clinical trial efforts, we need to do more, right? So, minimizing the requirement for the inpatient stay, you've heard me say that, really important. Optimizing the preconditioning regimen, some of the work we're doing on the legacy portfolio allows us to understand that much better than others might understand it. Reducing the burden of apheresis. I won't say more about that, but we think that's important. Innovating to address scale in autoimmune disease, not only our Solaris and other relationships we may enter into to arrive at a scalable and efficient manufacturing process. And we're at a moment -- I was in cell therapy a long time ago, we're at a moment where there are enough resources being applied to cell therapy manufacturing that efficient manufacturing of cell products in closed systems is going to occur. And we will leverage those opportunities as appropriate. And more than that, whether it is iPSC or just NK or whatever the technology, as we did with CABA-201, if we see something, we will say something and we'll do something. And just like CABA-201, there's room for everything in this very large autoimmune market when it comes to the new modalities that are coming on to the clinical profile of products being studied. So just in closing, I would say, every member of this team is the initial member of the team. That's astonishing. This company was formed in 2018. Every member of my leadership team accept our General Counsel, who replaced an individual who had to leave for different reasons. That's important for investors to understand because this is an incredibly well-oiled machine. Starting in October of 2022, having the 4 INDs cleared, the 2 trials up and running, 6 or 8 clinical sites on ClinicalTrials.gov that are very soon all going to be opened and enrolling. It's all because we work as a really seamless family. That has earned a lot of recognition actually, nationally, one of the Top 20 companies to work for in all industries, nationally, one of the top biotech companies to work for. I know most investors don't care about this, but I'm telling you it is the most important thing you should care about. At the end of the day, we put up a job posting. We have 50 to 70 applicants within a day or 2. And we're getting great people as we expand rapidly. We are really poised to execute and I'm thrilled at the opportunity to be able to deliver data in the first half of this year and then again in the second half as we pursue pivotal trials as soon as possible based on the data. I really appreciate everybody both staying awake, which is great at the end of the day, and your engagement. Thanks. I look forward to any questions.

Thank you again, Steven, for such a comprehensive presentation. We'll now open up for Q&A. Maybe I can just kick it off with one question. I think we can all agree that recently we've seen a lot of CAR T players pivot to autoimmune diseases, but you've been doing this for 6 years. Can you tell us a little bit about what is and how differentiated your path has been?

Yes. So, many of the players that have pivoted from oncology into autoimmunity, have reached out to ask for the potential partnership on their programs because they don't even have a rheumatologist or a neurologist onboard. Many of them are of the opinion that it would be better to partner than it would to do it themselves because by the time you hire the people, you're behind. So, we actively look at all these opportunities. And I think what they are recognizing is the unique skill set that comes from our Chief Medical Officer, David Chang, who by the way, we're developing a lupus product here, right? In our lifetimes, I don't think there's anybody older than 65 in the room, and if there is, you feel good about what I just said. In our lifetimes, there have been 2 products approved for the treatment of lupus in the United States of America. David developed one at GSK and the second one at AstraZeneca. Every other lupus effort has failed. We understand how to develop the products. And that's just one sampling of the talent that we have inside the company. Getting a clinical site to have the oncology or hematology expert who is an infusion specialist at the institution instituting CAR T therapy to even know who the rheumatologist is, to have them meet, to see if they actually like each other, to see if they want to work together, if the oncologist wants to sacrifice a spot or 2 to be able to have an autoimmune patient treated, it is like that. And it's not one budget. It's a budget for the oncology group and it's a budget for the rheumatology group. It's a contract with each. Oh, by the way, the institution has somebody at the table, too. At our first site that we opened, there were 33 people on a Zoom call where everybody was agreeing it's time to open the site. 3 of them were from Cabaletta. That's what it takes to implement these trials. You will notice that we have 6 or 8 sites that I'm telling you in the coming weeks, we'll be opening. And that's only the beginning. So, while I've heard some rumors from many of the investor meetings we've had in the past day or 2, that somehow there's -- operationally, we are slowing down or some problem. The opposite is the case. We are accelerating our efforts and we will end up realizing the vision that's on that first slide.

Maybe just going back to the basics. Would you mind just walking us through the fundamental differences between CAR T and autoimmune diseases versus CAR T and oncology?